Navistar recorded adjusted net loss of $1.44 per share in the
second quarter of fiscal 2014, wider than the Zacks Consensus
Estimate of a loss of $1.30. Navistar's revenues rose 8.7% year
over year to $2.75 billion, beating the Zacks Consensus Estimate of
$2.67 billion. The upside in revenues was driven by the company's
improving market share. Navistar expects Class 8 industry sales in
fiscal 2014 to be in the range of 225,000 235,000 units in the U.S.
and Canada. The company is also positioned to benefit from product
launches, cost-saving initiatives and higher production. However,
we are concerned about intensifying competition and strict EPA
regulations, which are likely to impact the profitability of the
company. As a result, we are maintaining our Neutral recommendation
Based in Illinois, Navistar International Corporation (NAV)
manufactures and markets International brand commercial and
military trucks, MaxxForce branded diesel engines and IC Bus ("IC")
branded school and commercial buses. The company also provides
service parts for trucks and diesel engines. Navistar is one of the
largest truck producers after Daimler and PACCAR.
Navistar operates through four industry segments, North America
Truck Segment (64.1% of total revenue in the first half of fiscal
2014), North America Parts Segment (24.8%), Global Operations
Segment (14.7%) and Financial Services Segment (2.3%). Segment
revenues do not add up to 100% due to Corporate and
The North America Truck segment manufactures and distributes
medium and heavy-duty trucks (class 4-8), military vehicles and
buses in the North America markets including the U.S., Canada, and
Mexico. The products are distributed under the International and IC
brands. The segment also designs engines under the MaxxForce brand
The Global Operations Segment consists chiefly of the operations
of wholly-owned subsidiary, International Ind stria de Motores da
Am rica do Sul Ltda. (IIAA) in Brazil and truck and parts export
businesses under the International and IC brands.
The North America Parts Segment supports the brands of
International commercial and military trucks, IC buses, MaxxForce
engines, as well as the other product lines. The segment provides
proprietary products as well as standard truck, trailer, and engine
The Financial Services Segment provides retail, wholesale, and
lease financing of products sold by the North America Truck and
North America Parts segments, as well as their dealers in the U.S.
Navistar International Corp. (NAV): Read the Full
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